In This Article:
China Galaxy Securities Co Ltd’s (HKG:6881) released its most recent earnings update in December 2017, which indicated that the company faced a major headwind with earnings deteriorating by -22.76%. Below, I’ve presented key growth figures on how market analysts predict China Galaxy Securities’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. See our latest analysis for China Galaxy Securities
Analysts’ expectations for this coming year seems optimistic, with earnings growing by a robust 14.37%. This growth seems to continue into the following year with rates arriving at double digit 33.14% compared to today’s earnings, and finally hitting HK$5.63b by 2021.
Even though it’s helpful to be aware of the growth rate each year relative to today’s level, it may be more beneficial evaluating the rate at which the company is growing on average every year. The advantage of this technique is that we can get a bigger picture of the direction of China Galaxy Securities’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12.93%. This means, we can presume China Galaxy Securities will grow its earnings by 12.93% every year for the next few years.
Next Steps:
For China Galaxy Securities, there are three key aspects you should look at:
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Valuation: What is 6881 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 6881 is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 6881? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.